AMCs Q3 Results Preview - Healthy Growth In Equity To Protect Profitability: Prabhudas Lilladher

Prabhudas Lilladher Report

Industry month's average assets under management as at November 2023 stood at Rs 48.75 trillion and equity/debt share was 51%/18%. Equity flows continue to remain strong; excluding new fund offers, October 2023 and November 2023 combined, saw net flows of Rs 394 billion compared to Rs 424.7 billion in Q2 FY24.

Equity quarterly average assets under management growth is expected to be strong for FY24E as closing equity assets under management (including balanced) has seen healthy year-to-date growth of 31% as at November 2023.

On the flipside, due to stronger AuM growth equity yields could fall more sharply owing to the total expense ratio structure.

We expect AMCs in our coverage to see overall/equity QAAuM growth of 4.1%/9.3% QoQ (versus 7.9%/10.1% in Q2 FY24).

Equity QAAuM growth for HDFC Asset Management Company Ltd. would be superior to UTI Asset Management Company Ltd. owing to stronger equity performance, while core income for our coverage AMCs could grow by 5.2% QoQ.

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